18 August 2015

This week, participants in Cammack Health's Benefits Survey of Hospitals are receiving their copies of the final report. With over 160 hospitals represented across 89 health systems in seven states, the survey has grown considerably from its humble beginnings ten years ago.

This year, the impending Cadillac tax is the troubling specter on the horizon of healthcare reform. The survey data makes it clear that many health system employers will be subject to the tax starting in 2018 if they make no changes. It's entirely possible that “high” plans, or buy-up plans, may become a thing of the past as the Cadillac tax puts pressure on employers to reduce benefits. And, if we include the value of FSAs in our total tax calculation, it's hard to imagine a scenario in which employers continue to offer FSAs past 2018.

On the other hand, hospitals have been quick to adapt to the ACA's requirements. While other employers scrambled to meet the employer mandate’s rules to cover employees working 30 hours or more, hospital employers generally met the requirements – at least for 2015. Many hospitals have upgraded systems and improved internal communication to comply with the strict standards.

In general, hospitals are becoming creative in developing alternatives to curb costs. Some hospitals are adding domestic tiers within tiers in their networks, incentivizing ACO-based or employed physicians within their domestic tiers. In the pharmacy arena, more hospitals are moving to coinsurance-based plans – and to separate copays or coinsurance for specialty drugs.

All in all, the 1-2% trend we saw this year in the average per-employee-per-year gross cost is reflective of the choices many hospital employers have made to make plan changes in order to meet ACA requirements. Though the methods of dealing with the impending changes vary, every employer is grappling with the increasingly worrisome reality that the PPACA will increase costs before it manages to reduce them.

We're grateful to the survey participants who make this project possible. The survey report is only available participants, and is not published or sold; health systems interested can request to participate in the 2016 survey on our Benefits Survey page, or download a highlights document from the 2015 survey.